ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Commonwealth MBA/MPA Programme)

Course: E Commerce (5576)

Semester: Autumn, 2014

ASSIGNMENT No. 1

by

FAISAL SAFDAR KHAN

ROLL NO. AW565146

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Faisal Safdar Khan

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Q.1 What is E-Commerce? Discuss its role in business in Pakistan. Describe and discuss
the framework for E-Commerce and its major components.
E-COMMERCE
Commonly people use the terms e-commerce and e-business interchangeably. Mostly
the term E-commerce is referred to the online shopping (on internet), and sometimes
people use the term e-business while they are talking about e-commerce activities.
However, e-commerce
E-Commerce is technique to use electronic means of communication to generate
economic values / activities including management, facilitation and execution of
business and in trade.
Electronic communication is used as the medium through which economic values are
designed, produced, advertise, catalogued, inventoried, purchase and settlement of
accounts for business. E-commerce is dependent upon the technology

Hardware

Software

Benefits of E-commerce
E-commerce enables and facilitates

Entry of SMEs in global markets

Reduction in cost of doing business

Development of new services and goods

Negotiation and completion of the terms of sale

Customizing the products

Inventory and supply chain management

Implementation of E-commerce
Telecommunication technology plays fundamental and vital role in all aspects of ecommerce. E-commerce implements through the following infrastructures.

Well-developed communication system

Well-developed web portal

Development of internet

Development of new hardware (Pc, modem, phone)

Modes of delivery for telecommunications services

Via wire

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Via radio (wireless)

Telecommunications via wire or wireless

Land lines for standard telephony

Broadband landlines not from telephone companies (cable modem)

Wireless telecommunications deal with national policy of radio spectrum etc

Cell phones

Televisions

Radio

Development of national internet infrastructure:

E-commerce is internet based communication service. Internet disseminate the
information (messages) via packet switching into discrete packets, those can travel to
ultimate destination via different routes for reassembly at the final destination with the
speed of light.
Alongside packet switching, the growth of internet switching was accelerated by the
enabling of software development

Easy to use Internet Browser Software

Search Engines

Secure payment software

E-commerce services:
Modern telecommunications allow services delivered globally. Areas where services
have global competition are:

Call Centers and Help desks

Accounting

Translation and Editing

Entertainment deliverance

Medical diagnostic services

Customer ordered merchandise or service on line online payments

Banking Sector
A well-developed financial service/ banking sector is essential for the growth of ecommerce. Solutions for the two fundamental issues affecting e-commerce will
determine its worldwide growth:

How customer will make payment

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Ensuring that Goods or Service provider receives payment

Payment mode in E-Commerce

Credit Cards

Debit Cards

Payment to an account owned by the service provider at bank

The use of credit and debit cards to make payment over the internet has raised security
concerns.
The need for security has led to new e-commerce services such as secure payment
services i.e. pay, Pal etc, which make use of encryption and other security features.
ROLE OF E-COMMERCE IN PAKISTAN
When the government started an information technology and e-commerce initiative in
early 2000, the banks were expected to lead the way into e-commerce. Although, the
banking sector is the leading spender on information communications technology, the
most progress in e-commerce has been in e-government. Almost all branches of
commercial banks in urban areas are now computerized. Many banks offer online funds
transfers from overseas and within country, buying mobile phone and internet cards
through your online wallet and other small scale online transactions. Almost all banks
now offer mobile-phone banking, where customers can pay utility bills using their mobile
phones. Further, money can be transferred to any city within minutes now. This is all the
progression of Ecommerce in Pakistan.
From local shops to online buying of books, laptops, gadgets, cars, and now clothing,
grocery, and other daily use items, Pakistan has undergone a considerable
development in Ecommerce industry. Pakwheels.com, Beliscity.com, Shophive.com,
and now Groupin.pk are serving users with what actually need. Although the
progression of ecommerce cannot be compared to that of developed countries or even
Indian e-commerce, there has been a significant development in terms of number of
online shops and transactions. The development is on quite slower pace like Internet
merchant accounts were permitted by the State Bank of Pakistan in February 2001 but
due to inadequate infrastructure and security concerns only Citibank offered these
accounts in 2006. These merchant accounts are used by airlines and chain of hotels
and a very few medium scale businesses.
Pakistan is still an under developing country and is in a process of making its way
towards the world of technology. The internet is prevailing like dark cloud on Pakistan
and it will hit the Pakistan economy positively in the near future. People are getting
aware of the importance of business on the internet rapidly and this will prove good in

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the favor of Pakistan. Banks are playing an important role in increasing the awareness
of e-Commerce in Pakistan, like introducing Debit Cards for internet usage, recharging
cell phone and paying bills directly from bank account while sitting at home and so on.
But what Pakistan need at the moment is sped up growth in the sector.
There is good scope of e-commerce in Pakistan not only for buyers and sellers, but too
many employment opportunities are there in web business which can stimulate the
economic growth of the country. A strong surveillance from Government on Cyber
Crime can make the environment much better and fruitful. Besides that we need social
entrepreneurs to bring a change in status quo.
FRAMEWORK & MAJOR COMPONENTS
A framework can be defined as a structure for supporting or attaching something else,
particularly a support that is used as the foundation for something being created.
Hence, an e-commerce framework comprises the set of infrastructure required for
carrying out the e-commerce business. This set of infrastructure typically includes the
network requirements and the different software applications that are for e-commerce.
The e-commerce vision summarized above assumes a series of essential infrastructure
services and values steady with a broad architectural framework. This framework must
allow flexibility,

interoperability and

directness

necessary for

the

successful

development of electronic commerce. The e-commerce framework offers a set of

options to the customers. Most of the electronic commerce plans have different
strategies for security and privacy, their skill to deal with the payments, and their
usability to different transactions. They also vary in their business models. Such
variations promote innovation and allows for supplier and customer options. But yet, you
need a broad framework to gain wide acceptance. This includes the following
requirements and peculiarities of carrying out various business forms in this upcoming
electronic environment.
Deciding on the best e-commerce framework is one of the major challenges for any
organisation. The framework should be selected based on the three evaluation points:

Features.

Requirements.

Luxuries.

Features are those elements of the framework that make it more prominent and clear
from other offerings.

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Requirements are the basic requirements of the framework that allow it to do its work.
If one among these is lost, then it becomes difficult to use a particular framework, even
with the presence of any other features.
Luxuries are the components whose presence is not so important, but they are
required to make the case for a framework that comes at a bonus price. The luxury
components add something extra to the system to make it worthy of the premium price.
The three important factors to look for in any e-commerce framework are:

Template management.

Core framework functionality.

Search engine features.

The framework should be adaptable in order to be able to cope with future evolution of
the site and market. At the same time, it should be able to support the existing business
and make it as easy as possible.
COMPONENTS OF E-COMMERCE FRAMEWORK
The important components of this framework are:
1. Network Infrastructure
2. Multimedia Contents And Network Publishing
3. Messaging And Information Distribution Infrastructure
4. Common Business Services Infrastructure
5. Public Policy And Technical Standards
1. Network Infrastructure
Network Infrastructure, called as INFORMATION SUPERHIGHWAY, is the path
through which actual information flows and moves between sender and receiver.
Information Superhighway consists of:

Telecommunication companies that provide telephone lines.

Cable TV systems that provide coaxial cables and direct broadcast satellite
networks.

Wireless companies that provide mobile radio and satellite networks.

Computer networks include private networks and public data networks like the
Internet.

All these modes of communication are interconnected. They are connected with
routers, switches, bridges, gateways etc which are devices to connect similar and
different network. All the information flow on these lines and through these devices
and reach the desired destinations.

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2. Multimedia Contents And Network Publishing

The Information Superhighway is the transportation foundation that enables the
transmission of content. The most prevalent architecture that enables networking
publishing is the World Wide Web. The web allows small businesses and individuals
to develop content in the form of Hypertext Markup Language (HTML) and publish it
on a web server. Web provides a means to create product information (content) and
a means to publish it in a distribution center. ( network server).
3. Messaging And Information Distribution Infrastructure
The information content transferred over the network consists of text, numbers,
pictures, audio and video. But the network does not differentiate among content as
everything is digital, that is, combinations of zeros and ones. Once contents has
been created and stored on a server, messaging and information distribution
methods carry that content across the network. Messaging vehicle is called
middleware software. Messaging and information distribution include translators that
interpret and transforms data formats.
4. Common Business Services Infrastructure
This infrastructure includes the different methods for facilitating online buying and
selling processes. In online commerce, the buyers sends an electronic payment as
well as some remittance information to the seller. Settlement occurs when the
payment and remittance information are authenticated by the seller and accepted as
valid. In order to enable online payment for information and ensure its safe delivery,
the payment services infrastructure needs to develop encryption (making contents
indecipherable except for the intended recipient) and authentication (making sure
that customers are who they say they are) methods that ensure security of contents
traveling on the network.
5. Public Policy and Technical Standards
Public Policy and Technical Standards are two support pillars for all e-commerce
applications and infrastructure. Public policy related to e-commerce encompasses
such issues as universal access, privacy and information pricing. Technical
Standards dictate the specifics of information publishing tools, user interfaces and
transport. Standards are essential to ensure compatibility across the entire network
of world. These are the main components of framework of e-commerce. By following
all these trade can be done efficiently on the network.

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Q.2 Compare the two and three tier Web Client server architectures, and indicate
the role of each tier in each architecture. Which architecture is the most likely
candidate for an electronic commerce site.
TWO TIER WEB CLIENT SERVER ARCHITECTURE
The term TIER refers to the relationship between the logical division of the application
components, i.e. presentation, application logic and data management, and the physical
architecture in which these components are divided.
Two-tier client server architecture uses only two sets of computers, one set of clients
and one set of servers. The two-tier architecture is like client server application. The
direct communication takes place between client and server. There is no intermediate
between client and server. The two-tier client server architecture delivers the
presentation component on the client and the database management on the server.
The figure shows the architecture of two-tier. Here the communication is one to one. Let
us see the concept of two tier with real time application. For example now we have a
need to save the employee details in database. The two tiers of two-tier architecture is
1. Client Application (Client tier)
2. Database (Data tier)

1. Client Application (Client Tier)

The client writes the program for saving the record in SQL Server and thereby
saving the data in the database.
2. Data Tier
Its the database and has data in it.
Advantages:

Understanding and maintenance is easier.

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Disadvantages:

Performance will be reduced when there are more users.

THREE TIER WEB CLIENT SERVER ARCHITECTURE

Three-tier architecture uses three sets of computers. In this case, the software on the
client computer is responsible for presentation logic, an application server is responsible
for the application logic, and a separate database server is responsible for the data
access logic and data storage.
Three tier architecture has three layers.
1. Client layer
2. Business layer
3. Data layer
1. Client layer:
Here we design the form using textbox, label etc.
2. Business layer:
It is the intermediate layer which has the functions for client layer and it is used to
make communication faster between client and data layer. It provides the business
processes logic and the data access.
3. Data layer:
It has the database. Here information is stored and retrieved from a database.
Advantages

Easy to modify without affecting other modules

Fast communication

Performance will be good in three tier architecture.

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CONCLUSION
Three-Tier web server architecture is most appropriate for electronic commerce, as it
provides fast communication, better performance and also provides the business
processes logic and the data access.

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Q.3

Faisal Safdar Khan

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Why are programs such as CGI scripts and java programmes that run on client
machines or on a web server considered security threats? Explain how programs
could breach security. Do Java script programs pose an equally serious security
risk?

CGI SCRIPTS
Common Gateway Interface (CGI) is a bit of software that translates what has
happened in one piece of software, into something that a different piece of software can
understand. In other words, CGI is a method for creating programmes that allow
external applications to interface with web servers in a standard way.

SECURITY THREATS & RISKS

The problem with CGI scripts is that each one presents yet another opportunity for
exploitable bugs. CGI scripts should be written with the same care and attention given
to Internet servers themselves, because, in fact, they are miniature servers.
Unfortunately, for many Web authors, CGI scripts are their first encounter with network
programming.
CGI scripts can present security holes in two ways:
1.

They may intentionally or unintentionally leak information about the host system
that will help hackers break in.

2.

Scripts that process remote user input, such as the contents of a form or a
"searchable index" command, may be vulnerable to attacks in which the remote
user tricks them into executing commands.

CGI scripts are potential security holes even though you run your server as "nobody". A
subverted CGI script running as "nobody" still has enough privileges to mail out the
system password file, examine the network information maps, or launch a log-in session
on a high numbered port (it just needs to execute a few commands in Perl to
accomplish this). Even if your server runs in a chroot directory, a buggy CGI script can
leak sufficient system information to compromise the host.
There are two ways in which CGI script vulnerabilities tend to manifest. The first is by
leaking system information that should be kept confidential, and the second by allowing
remote users to execute inappropriate commands.
The first case is less immediately dangerous, but harder to protect against. Practically
any piece of system information can be useful to a sufficiently wily attacker, and many
useful functions require the system to provide some data about itself. Some kinds of

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information that should not be disclosed without excellent justification include physical
paths to users' home directories, such as is returned by the finger daemon, information
about what programs users are running, such as is given by the w command, and
information on which daemons are running on the system, such as is returned by ps.
The second case represents a much more direct threat to the integrity of the system.
CGI scripts will generally be executed with the privilege of the web server; so if that
server is properly set up as an unprivileged user then damage will usually be
constrained to those parts of the system to which the server has access. Common
effects of such vulnerabilities include defacement of the web site and denial of web
service.
Finally, it is important to note that all of the general programming security concerns
apply to CGI programs like they do to any others.

JAVA PROGRAMMES
Java is a programming language and computing platform first released by Sun
Microsystems in 1995. Java is a software platform that is owned and supported by
Oracle. The Java platform consists of the Java Virtual Machine (JVM), which is installed
on the host computer, and user applications that are written using the Java
programming language.
The JVM is powerful, flexible and easily deployed to a wide range of devices. The JVM
software runs like any other program on the host. The JVM provides a bridge between
Java applications and the host computer.
Java can be used to create complete applications that may run on a single computer or
be distributed among servers and clients in a network.
Java applications are used widely to perform necessary business functions. Like most
available software, there have been security vulnerabilities found in Java. Combined
with its popularity, Java is particularly attractive to cyber adversaries seeking
unauthorized access into corporate networks.

SECURITY ISSUES
Java is heavily scrutinized by the IT community for new security flaws because it is
widely used and has a history of exploitable security vulnerabilities. The two categories
of Java intrusion are:

exploits that target security vulnerabilities in the JVM, via drive-by browser
exploitation

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malicious Java applications that run outside the sandbox as privileged applications,
which may be found on websites or as email attachments.

Once an adversary executes malicious code using either method, the compromised
system could be used to conduct activities such as stealing valuable information or
gaining access to other computers on the network.
Exploitation of the JVM is mostly associated with browsing to a malicious or
compromised website, but can also occur when opening an email or attachment. This
type of exploitation allows an adversary to run malicious non-Java code outside of the
JVM that compromises the native system. The adversary will gain the same level of
access as the user, or possibly even higher.

Java exploits are valued because they can grant access to a system without the
knowledge or authorization of the user.

The discovery of a new vulnerability by cyber adversaries could lead to exploitation

before a security patch is available.

Exploits targeting those vulnerabilities that have not been publically disclosed are
known as zero-day attacks. Once the vulnerability is publicly known, it is no longer
considered to be a zero-day.

Security vulnerabilities are exploitable up until the time that the patch has been applied.
This is a highly attractive window of opportunity for adversaries. In the time between a
patch becoming available and being applied, both the number and quality of exploits will
increase. For those agencies that are unable to patch quickly (usually for support of
legacy applications), known vulnerabilities remain exploitable.
Malicious Java applications
Malicious Java applets are presented as trustworthy or legitimate. Adversaries may try
to use targeted emails, known as spear phishing, to deliver a malicious website link or
email attachment that is relevant or interesting to the user. This type of social
engineering can entice a user to unknowingly permit the malicious application to run
with high privileges.
Malicious Java applets will request permission from the user with a pop-up dialogue
box. If the user trusts that the applet is safe and accepts the certificate, the malicious
applet can run in privileged mode. Once running with privilege, an adversary can access
parts of the system that were previously protected by the sandbox, such as files and
network connections.

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By default, Java applets running in the browser that request privileged mode will
request permission with a pop-up dialogue box. This setting can be changed in the
Java security control panel. Changing this setting to be more permissive will leave
computers at greater risk, and should not be done.

If the user declines the certificate, a Java applet can still run in sandbox mode. A
sandboxed application can still gather information that may be useful to the
adversary, but will not have as much freedom to cause harm as a privileged
application.

Java applications are run inside the JVM, and not the native operating system. Most
application whitelisting implementations cannot control Java applications. Generally, the
JVM is allowed to run, but there is no discrete control of Java applications that are run
by the JVM, even those that are known to be good.

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Q.4(a) Discuss some of the interactive web technologies that enable the interactive
functions of internet, which is essential for E-Commerce websites.
INTERACTIVE WEB TECHNOLOGIES
In computer science, interactive refers to software which accepts and responds to input
from humans. Initially the only way to interact with the web servers was to click on the
hyperlinks to surf between the documents. On the other hand, e-commerce needs much
more than this. For example, buying online an item from website like E-bay requires to
input personal data and the item required. Now, E-bay has to store some of the
personal information after processing, for future use. Then it has to process the order to
ensure delivery of correct item(s). Moreover, the displayed information has to be
updated in case of any change in prices, stock and / or specifications. To carry out all
these tasks, E-bay requires some application(s) / software(s) that can access the
dynamic data stored on external resources. These applications / software enabled the
web servers to be more interactive client / server medium.
Web page authors can integrate Java Script coding to create interactive web pages.
Sliders, date pickers, drag and dropping are just some of the many enhancements that
can be provided. There are variety of technologies that create various kinds of
interactivities, some of them are given below:

Interactive Forms

Common Gateway Interface (CGI)

Java

1. INTERACTIVE FORMS
An interactive form is a data-gathering window containing multiple questions that
interactively change based on user input. In other words, a user's response to one
question may cause one or more additional questions to be added to the window.
Forms are HTML (Hyper Text Markup Language) features that allow embedding
document features like buttons, check-boxes, selection lists, text-entry fields and
radio boxes that gather information from the users for a server application. Forms
can be used for almost every type of web transaction including surveys, data entry,
database queries, placing and tracking orders etc.
HTML defines tags for creating interface elements that can be placed within a form,
to interact with a user. There are three types of interface elements:

Input Fields used to enter and capture data

Text Areas, and

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Select Fields provide to create a dropdown list, from which a user can choose
one or more item.

2. COMMON GATEWAY INTERFACE (CGI)

CGI is a standard protocol for interfacing external application software with an
information server, commonly a web server. This allows the server to pass requests
from a client web browser to the external application. The web server can then
return the output from the application to the web browser.
Advantages of CGI

Language independence can be written in almost any language

Architecture independence not tied to any particular server architecture

Simplicity easy to understand

Open Standard some form of CGI has been implemented on virtually every
type of web server

Process isolation these applications run in separate processes, therefore bugridden applications cannot crash the web server or access the servers private
internal state

Disadvantages of CGI

Transient CGI programs are only active in the server while they are executing
a single request from a single client

Non-shareable CGI requires the server to create and execute a separate

program every time a request is made. The creation and execution of each copy
of a CGI program uses server resources like memory and process cycles. Since
CGI cannot be shared, when several simultaneous requests are mad, several
copies of the same CGI program must be created, thus putting heavy load on
the server.

3. JAVA
JavaScript is the programming language that runs in the browser, which is used to
build advanced user interactive Web sites and applications.
Java is a programming language and computing platform first released by Sun
Microsystems in 1995. Java is a software platform that is owned and supported by
Oracle. The Java platform consists of the Java Virtual Machine (JVM), which is installed

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on the host computer, and user applications that are written using the Java
programming language.
The JVM is powerful, flexible and easily deployed to a wide range of devices. The JVM
software runs like any other program on the host. The JVM provides a bridge between
Java applications and the host computer.
Java can be used to create complete applications that may run on a single computer or
be distributed among servers and clients in a network.
Java applications are used widely to perform necessary business functions. Like most
available software, there have been security vulnerabilities found in Java. Combined
with its popularity, Java is particularly attractive to cyber adversaries seeking
unauthorized access into corporate networks.

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Q.4(b) The commercial viability of e-mail model has been questioned in its current
implementation and in the current state-of-the-art market and many malls have
even gone out of business. Discuss possible reasons leading to the downfall of
the e-mall model.
E-MALL (ELECTRONIC MALL)
An electronic mall, also known as a cybermall or e-mall, is a collection of individual
shops under one Internet address. The basic idea of an electronic mall is the same as
that of a regular shopping mallto provide a one-stop shopping place that offers many
products and services. Representative cybermalls are Downtown Anywhere
(da.awa.com),

Hand Crafters

Mall (rocksworld.com),

Americas Choice

Mall

(mall.choicemall.com), and Shopping 2000 (shopping2000.com). As is true for vendors

that locate in a physical shopping mall, a vendor that locates in an e-mall gives up a
certain amount of independence. Its success depends on the popularity of the mall, as
well as on its own marketing efforts. On the other hand, malls generate streams of
prospective customers who otherwise might never have stopped by the store. Each
cybermall may include thousands of vendors. For example, shopping.yahoo.com and
eshop.msn.com include tens of thousands of products from thousands of vendors.
Electronic retailing (e-tailing) is the direct sale of products through electronic
storefronts or electronic malls, usually designed around an electronic catalog format
and/or auctions.

ISSUES IN E-MALL MODEL

The commercial viability of the e-mall model has been questioned in its current
implementation and in the current state-of-the-market. For example IBM World Avenue,
has folded. One of the reasons may be that the neighbour concept does not translate
into physical distance in cyberspace, where each location is only one click away.
Therefore, not much additional convenience in finding shops is delivered. The following
are the major issues faced by e-tailers.

Channel conflict - If the seller is a click-and-mortar company, it may face a conflict

with its regular distributors when it sells directly online. Known as channel conflict,
this situation can alienate the regular distributors and has forced some companies
(e.g., lego.com) to limit their B2C efforts; others (e.g., automotive companies) have
decided not to sell direct online. However, a better approach is to try to collaborate
in some way with the existing distributors whose services may be restructured.

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Order fulfillment - E-tailers face a difficult problem of shipping very small quantities
to a large number of buyers. This can be expensive, especially when returned items
need to be handled.

Viability of online e-tailers - Most of the purely online e-tailers (excluding service
industries) were unable to survive and folded in 20002002. Companies had
problems Section 9.2 Business-To-Consumer Applications 279with customer
acquisition, order fulfillment, and forecasting demand. Online competition, especially
in commodity-type products such as CDs, toys, books, or groceries, became very
fierce, due to the ease of entry to the marketplace.

Conflicts within click-and-mortar organizations - When an established company

decides to sell direct online, on a large scale, it may create a conflict within its
existing operation. Conflict may arise in areas such as pricing of products and
services, allocation of resources (e.g., advertising budget) and logistics services
provided to the online activities by the offline activities (e.g., handling of returned
items purchased online). As a result of these conflicts, some companies have
completely separated the clicks (the online portion of the organization) from the
mortars (the traditional brick-and-mortar part of the organization). This may
increase expenses and reduce the synergy between the two.

Lack of funding - The so-called dot-com companies enjoyed almost unlimited

funding between 1995 and 1998. After burning lots of money and being unable to
generate profits quickly, the sources of funding dried up, resulting in many
bankruptcies.

Incorrect revenue models - Many dot-com companies were selling at or below cost
with the objective of attracting many customers as well as advertisers to their sites.
The idea was to generate enough revenue from advertising. This model did not
work. Too many dot-com companies were competing on too few advertising dollars,
which went mainly to a small number of well-known sites such as AOL and Yahoo!.

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Q.5 What are the pitfalls of the pure-play mode of B2C e-commerce? Discuss how
B2C e-commerce strategy can be repositioned to combine the strength of both
physical and virtual business channels in the click and mortar mode of
operations.
PURE-PLAY MODE OF B2C E-COMMERCE
In e-business terms, a pure play is an organization that originated and does business
purely through the Internet; they have no physical store (brick and mortar) where
customers can shop. Examples of large pure play companies include Amazon.com (in
its initial business when it was only involved in retail products) and Netflix.com (in
content). With a much lower barrier to entry, the Internet affords smaller companies the
ability to compete with much larger brands due to typically lower overhead and
marketing costs.

DRAWBACKS OF PURE-PLAY MODE OF B2C E-COMMERCE

Though the web-based selling has captured good position in the markets, yet the
financial performance of most of them has not turned out as well as expected.
According to a research in 1999, in US there were 3.2 million new online banking
customers. However, 3.1 million other customers gave up on it, showing that how
quickly customers abandon websites. According to a survey, for every completed online
transaction, almost four times as many are abandoned. The main reasons are:

Slow processing of purchase orders

Links to out-of-stock products,

High shipping costs,

Security concerns,

After-sales support,

Cases of fraud (non-delivery etc)

Difficulty in returning damaged or wrong products,

Most e-tailers lose money on each transaction.

Pure plays usually dont have the advantage of established brand names, customer
bases and inventory system; they have to start from ground zero, and must devote their
resources and time to building a brand name and customer base.
Pure plays are occasionally beset with costly email viruses, and must be evervigilant
against spammers. Security and technical problems sometimes have to be dealt with;

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they must retrain for the Internet sales format, must learn how to use an email dialogue
with customers, starting slowly and, because customer trust of the pure play retailer is
often lacking, they must gradually build the customers trust.
Some retailers consider the Internet technology to be too expensive, too difficult to use,
of little value, or intrusive. Many consumers believe that ads and cookies invade their
privacy. Many consumers hesitate to shop from a pure play retailer because they
cannot try or feel an item before purchasing nor, in the case of clothing, try it on. Many
find it inconvenient to return purchased goods if they are not satisfactory and large
percentage are not comfortable using a credit card online and disclosing their personal
information. Customer service is often lacking, as well as proper delivery of goods.

CLICK AND MORTAR MODE B2C E-COMMERCE

Click & mortar business models combine a physical presence with online selling or
marketing. Click & mortar businesses may operate a website that sells products or
advertises those it sells on the high street. The difference between the two business
models is reflected in running costs, marketing strategies and customer perceptions.
Internet business have fewer overheads but businesses that have a strong street
presence inspire more customer confidence.
SUCCESSFUL B2C E-COMMERCE THROUGH CLICKS & MORTAR OPERATIONS
We can have success in B2C business models in E-Commerce through some of the
following key elements of Clicks and Mortar strategy:

Marketing
Pure-play companies have to invest more money, time and effort in marketing than
a hybrid businesses. Businesses that have a physical presence, particularly on a
national or international scale, are already known to potential customers, whereas
Internet business have to advertise their presence more aggressively. According to
CRM magazine, the average Pure-play company spends $82 dollars to acquire a
new customer, whereas a traditional retailer spends $12 dollars.

Perception
Business that combine a presence on the street with online retailing may inspire
more customer confidence than those that only operate online, according to the
Internet Marketing Center. Customers believe that a business is less likely to vanish
overnight if it has a customer presence, the website explains. However, online
businesses that have built up an excellent reputation for customer service and

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respond to telephone calls and emails quickly and professionally also inspire
customer confidence.

Customer Retention Customer Loyalty

In cyber-world, competitors are only a click away and customer loyalty is much lower
than any other mode of business. Online customers are more sophisticated and
demanding. A good online customer must be supported by other traditional
(physical) customer services like call centres, return spots etc.

Transactions across Multiple Channels

It is important for retailers (e-tailers) to integrate online channels with the various
traditional channels, by providing an integrated order management mechanism. A
customer may have to go through the various order processes like he may look at a
product in store, research its details and place the order, contact the retailers call
centre to modify the order if required and may return the product for any reason.

Fulfilling and Delivering

In past, there were a number of instances that during holiday seasons, internet
retailers were unable to fulfill the orders. Therefore, it is really important for e-tailers
that they must have a robust e-fulfillment infrastructure, which will drive customer
satisfaction and increase the growth. Moreover, information such as item availability,
confirmation of delivery date, order completion, order tracking, notice of late delivery
etc should be available online.

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REFERENCES

E-Commerce by Gary Schneider - 9th Ed

E-Commerce Code 5576 COL MBA AIOU

http://peoi.org/Courses/Coursesen/emarket/Resources/Business Models for

Electronic Markets

http://en.wikipedia.org/wiki/Pure_play

http://www.programmingsimplified.com/java-source-codes

http://searchsoa.techtarget.com/definition/Java

http://krebsonsecurity.com/tag/java/

http://www.zdnet.com/article/how-big-a-security-risk-is-java-can-you-really-quitusing-it/

http://en.wikipedia.org/wiki/Web_2.0#Technologies

http://seclab.cs.ucdavis.edu/projects/testing/papers/cgi.html

http://www.w3.org/Security/Faq/wwwsf4.html

http://www.slideshare.net/abidi512/e-commerce-12919436

http://blog.digitalstruct.com/2007/08/02/e-commerce-framework-part-2/

http://happening.pk/meetup/e-commerce-and-its-role-in-fostering-economicdevelopment-in-pakistan/

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